Final answer:
Full employment is achieved when the economy has an unemployment rate of 4% or less, which accounts for the natural level of job turnover. The Full Employment and Balanced Growth Act of 1978 set specific goals for full employment, although the rate can vary by state due to various economic factors.
Step-by-step explanation:
The full employment unemployment rate in the economy is deemed to have been achieved when a certain unemployment level, which is considered natural and unavoidable, is reached. This level is typically linked to full-employment GDP, sometimes referred to as potential GDP, and takes into account that there will always be some degree of turnover in the labor force, as people are transitioning between jobs or not able to work for various reasons.
Achieving full employment does not equate to a 0% unemployment rate, which is an unrealistic goal, but rather to an unemployment rate that is low and stable, reflecting the natural churn of the job market. Historically, an unemployment rate of 4% or less in the United States is often considered indicative of full employment, as stated in the expectations set by the Full Employment and Balanced Growth Act of 1978, also known as the Humphrey-Hawkins Act.
It's important to note that different regions and states can have varying full employment rates, influenced by a range of factors, including the structure of regional economies, industry concentration, and demographic trends. For example, in the early 1990s, California's unemployment rate was higher than the national average partly due to sector-specific economic changes.